Gold Comes Alive

Something is brewing. I’ve been long gold since late 2012, gotten crushed, but held on to everything, totally white-knuckled and confident. Gold is up over $30 in the premarket this morning, this while equities are crashing and money supply is still expanding fast.

This tells me that rapid inflation is at the doorstep. I called a bottom earlier, and now I’m as close to 100% positive on the bottom as you can get in market prognostication.

If gold is moving higher with treasuries, just wait until treasury bonds start collapsing along with stocks.

When oil stops falling, gold will move higher even faster than it is now. There is quite a long way to go before getting back to 2011 highs. Plenty of time to get in here.

Several years ago, I decided to try to learn the investing game. I went through the newspaper (yeah, that’s how long ago…I haven’t read a newspaper in quite a while) and picked out a gaggle of stocks. Then I assigned a number of shares to each so the investment would add up to a nice round $1000.

Then I waited and watched.

It’s a good thing the money was imaginary because I got clobbered. Clearly there was stuff about investing in stocks that I didn’t understand.

So I went back to thinking about fundamentals, and I decided that my rule would be “That which can’t go on forever, won’t.” I then invested in metal and rode that wave to the top….and the bottom. This time, I didn’t feel like a sucker because the fundamentals told me money printing will result in price increases in fixed assets like precious metals and real estate. It also told me that the central banks will do everything they can to prevent price increases in those items, even as they continue to print money. So I’ve been comfortable sitting and waiting, even though my wife thinks I’m an investing idiot (refer to my stock picks, above). I tell her to not think about the metal as a loss, nor that it is going to make us rich (it won’t), but that it is an insurance policy that will allow us to eat when bad times come.

She humors me.

I think you’re right about the bottom. I think TPTB have more tricks they will use to keep the price of metals under control, which will only make the eventual break to the upside more extreme. I don’t pretend to know when that will happen. But there is one truth that nobody can ever change: “That which can’t go on forever, won’t.”